For businesses operating in New Mexico, understanding and managing gross receipts tax is crucial. Non-taxable Transaction Certificates (NTTCs) serve as a vital tools box for car Informational, Transactional, offering a mechanism to legally deduct receipts from qualified transactions. This guide provides essential information for sellers, lessors, and resellers to effectively utilize NTTCs, ensuring compliance and maximizing tax benefits.
Understanding NTTCs: Your Business Toolkit
The New Mexico Taxation and Revenue Department (TRD) categorizes NTTCs by type, each linked to specific tax deductions. To gain a comprehensive understanding of NTTC types, it is recommended to consult FYI-204: Nontaxable Transaction Certificates (NTTCs) or Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTC).. These resources detail the various NTTC classifications and their corresponding applications.
NTTCs for Sellers and Lessors: Reducing Your Tax Burden
In New Mexico, sellers and lessors bear the legal responsibility for gross receipts tax. While you may choose to pass this tax on to your customers, possessing a valid NTTC from the Taxation and Revenue Department allows you to deduct receipts from eligible transactions, effectively reducing your gross receipts tax liability.
Crucially, a single NTTC from a customer is sufficient to cover all transactions of the same type with that customer. When a customer provides you with a properly executed NTTC, you are not required to charge gross receipts tax on qualifying transactions. NTTCs serve as definitive proof that transaction proceeds are deductible, provided you, as the seller or lessor, accept the NTTC in good faith from the purchaser.
It’s important to note that while NTTCs offer a streamlined approach, alternative documentation can be accepted for many deductions under Section 7-9-43 NMSA 1978 of the Gross Receipts and Compensating Tax Act. However, deductions under Section 7-9-46 NMSA 1978 specifically require a Type 11 or Type 12 NTTC.
Note: For Type 6 NTTCs, which previously required contractor’s license verification, there has been a change. As of April 1, 2016, the Construction Industries Division (CID) of the Regulation and Licensing Department no longer mandates licensing for certain classifications, including GS-3 tile, GS-10 fencing, and others listed in the original document. For applicants in these categories seeking a Type 6 NTTC, applications can be submitted through the Taxpayer Access Point portal at https://tap.state.nm.us or by contacting the department at [email protected].
NTTCs for Resellers: Tax Exemption on Purchases
If your business operates as a reseller, NTTCs can be instrumental in exempting you from paying gross receipts taxes on qualified purchases. Upon registering with the Taxation and Revenue Department and obtaining a New Mexico Business Tax Identification Number (NMBTIN), you can apply for and manage NTTCs online via the Taxpayer Access Point (TAP).
It is critical to understand that resale certificates issued by other states are not valid in New Mexico. As an alternative to a Type 2 NTTC, customers not obligated to register with the Taxation and Revenue Department may utilize a Multijurisdictional Sales and Use Tax certificate from the Multistate Tax Commission or a Border States Uniform Sale for Resale certificate. Further details on these alternatives are available in FYI-204: Nontaxable Transaction Certificates (NTTC’s).
Taxpayer Access Point (TAP): Your Online NTTC Management System
The Taxpayer Access Point (TAP) provides a convenient online platform for managing NTTCs. Buyers and lessees with a valid New Mexico Business Tax Identification Number (NMBTIN) can utilize TAP to obtain, execute, print, and view their New Mexico NTTCs electronically through Taxpayer Access Point.
A significant advantage of the electronic system is that you are not required to print a physical copy of an NTTC managed electronically. The electronic record maintained by the Taxation and Revenue Department serves as the official record.
Paper NTTCs: Continued Validity and Application
While electronic NTTC management is available, paper NTTCs remain a valid option. The New Mexico Legislature eliminated the expiration date for Series 1992 paper NTTCs, meaning all executed Series 1992 NTTCs are still valid. You can continue using your existing paper NTTC supplies or acquire new ones by completing Form ACD-31050, Application for Nontaxable Transaction Certificates (NTTC)..
Each application for paper NTTCs has a limit of five certificates. To apply, complete form ACD-31050, Application for Nontaxable Certificates, which can be found at the bottom of the relevant webpage.
Contact Information and Resources
For further assistance or inquiries regarding NTTCs, please reach out to the New Mexico Taxation and Revenue Department through the following channels:
New Mexico Taxation and Revenue Department
P.O. Box 5557
Santa Fe, New Mexico 87502-5557
You can also contact your Local District Tax Office or send an email to [email protected].
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